Verkada

Verkada Inc. is a San Mateo, CA-based company that develops cloud-based building security and operating systems. The company combines security equipment such as video cameras, access control systems and environmental sensors, with cloud based machine vision and artificial intelligence.

The company was founded in 2016. In 2021, it was the target of a data breach that accessed security camera footage and private data.

History
Verkada Inc. was founded in 2016 in Menlo Park, California by three Stanford University graduates: Filip Kaliszan, James Ren, and Benjamin Bercovitz, who were joined by Hans Robertson, co-founder and former COO of Meraki (now Cisco Meraki). Kaliszan, Ren, and Bercovitz had previously collaborated on CourseRank, a class data aggregation platform that was acquired by Chegg in 2010.

Verkada exited the beta development stage in September 2017, with a product offering of two camera models.

In 2019, Forbes included Verkada in its Next Billion Dollar Startups list, as well as that year’s AI 50 list of most promising artificial intelligence companies. In April, the company announced a $40 million Series B funding round, which valued the company at $540 million.

In January 2020, the company raised $80 million in a Series C funding found led by Felicis Ventures, giving the company a $1.6 billion valuation. In spring 2020, the company launched its first access control device, the first move in a shift to moving beyond cameras, and integrating security cameras and locks onto a single platform. In June during the COVID-19 crisis Verkada instituted a program to offer free surveillance kits to businesses and healthcare institutions in order to remotely monitor high-risk locations. It also added features to let customers detect when crowds are forming, and to identify high traffic areas that might need more cleaning. In September, the company launched a line of integrated environmental sensors. In September, it introduced a line of environmental sensors for facilities monitoring.

In April 2021, news site Bloomberg News reported allegations by former employees accusing the company of having a "bro" culture, with lax device security, excessive focus on profit, and parties during the COVID-19 pandemic. In the Bloomberg reporting, Verkada acknowledged an internal lapse in judgment, and was reportedly working to create a more inclusive work environment, including reviewing gender pay equity and implementing better training. In September, the company began donating security cameras to Asian Pacific American business communities, starting with the Oakland California Chinatown Chamber of Commerce, to address growing anti-Asian threats and violence against its members.

In August 2022, the company announced a mailroom product to help companies keep track of mail packages and shipments coming into their facilities. In September, the company raised $205 million in Series D funding, bringing its valuation to $3.2 billion. Despite the data breach it suffered in 2021, the company continued its expansion. In October 2023 it managed to close a $305 million funding round with participation from Lightspeed and shortly after the injection of $100 million by Alkeon Capital.

Data breach
On March 8, 2021, Verkada was hacked by an international group including maia arson crimew and calling themselves the "APT 69420 Arson Cats," which gained access to their network for about 36 hours and collected about 5 gigabytes of data.

Initially, it was reported that the scope of the incident included live and recorded security camera footage from more than 150,000 cameras. It was later reported that 95 customers' video and images data were accessed  Crimew told Bloomberg News that the hack "exposes just how broadly we're being surveilled".

In response to the data breach, in April 2021 it was reported that Verkada CEO Filip Kaliszan announced a series of measures, including red team/blue team exercises, a bug bounty program, mandatory two-factor authentication use by Verkada support staff, and the sharing of more audit logs with Verkada customers.

Controversies
In August 2021, Motorola Solutions filed a 52-page complaint against Verkada with the United States International Trade Commission, alleging that Verkada cameras and software infringe upon patents held by Motorola subsidiary Avigilon. Verkada subsequently filed a lawsuit against Motorola Solutions in the California Northern District Court in September 2021, arguing that Motorola has "sought to effectively shut Verkada’s business down." Later in September, the International Trade Commission initiated its investigation into Motorola's complaint, with Verkada stating in its response that it does not infringe upon any of Motorola's patents.

On October 24, 2022, the presiding administrative law judge (“ALJ”) of the ITC issued a final initial determination (“FID”) finding that a violation of section 337 has occurred, that Verkada's products infringed claims 6–11 of 1 of 3 patents asserted by Motorola, but no infringement with respect to the other asserted claims of the 1 patent and the claims of other 2 patents. Both Verkada and Motorola filed for ITC review of the FID. On April 4, 2023, ITC issued a final determination and terminated the ITC investigation, finding that Verkada products did not infringe any of Motorola's 3 patents.

Verkada uses facial recognition in its cameras, including systems installed in public housing. Independent testing showed a 15-85% false positive rate in the matches. The use of surveillance cameras equipped with facial recognition technology ends up affecting the daily lives of residents in poor neighbourhoods and public housing areas. Their use makes their existence even more difficult and complicated, and there is no evidence of their usefulness in reducing crime. Facial recognition has been outlawed in Illinois and Texas and has been under scrutiny by HUD.